BILL NUMBER: AB 576	CHAPTERED  04/17/00

	CHAPTER   13
	FILED WITH SECRETARY OF STATE   APRIL 17, 2000
	APPROVED BY GOVERNOR   APRIL 14, 2000
	PASSED THE ASSEMBLY   APRIL 10, 2000
	PASSED THE SENATE   APRIL 3, 2000
	AMENDED IN SENATE   MARCH 27, 2000
	AMENDED IN ASSEMBLY   JANUARY 18, 2000
	AMENDED IN ASSEMBLY   JANUARY 3, 2000
	AMENDED IN ASSEMBLY   MAY 12, 1999
	AMENDED IN ASSEMBLY   APRIL 28, 1999
	AMENDED IN ASSEMBLY   APRIL 13, 1999

INTRODUCED BY   Assembly Member Honda
   (Coauthor:  Senator Sher)

                        FEBRUARY 19, 1999

   An act to amend Section 3097 of the Civil Code, relating to
mechanics' liens, and declaring the urgency thereof, to take effect
immediately.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 576, Honda.  Mechanics' liens.
   Existing law requires all persons and laborers who are entitled to
a lien upon the property upon which they have bestowed labor or
furnished materials or leased equipment, as specified, to enforce
such a lien only if he or she has served a preliminary 20-day notice
to the property owner that contains certain information, as
specified.
   This bill would revise the required statements in the preliminary
20-day notice, and would  provide that the inclusion of, or failure
to include, language added to the preliminary notice, or the failure
to provide an affidavit form or notice of rights pursuant to Chapter
795 of the Statutes of 1999, shall not affect the validity of the
preliminary notice.
   This bill would declare that it is to take effect immediately as
an urgency statute.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 3097 of the Civil Code is amended to read:
   3097.  "Preliminary 20-day notice (private work)" means a written
notice from a claimant that is given prior to the recording of a
mechanic's lien, prior to the filing of a stop notice, and prior to
asserting a claim against a payment bond, and is required to be given
under the following circumstances:
   (a) Except one under direct contract with the owner or one
performing actual labor for wages as described in subdivision (a) of
Section 3089, or a person or entity to whom a portion of a laborer's
compensation is paid as described in subdivision (b) of Section 3089,
every person who furnishes labor, service, equipment, or material
for which a lien or payment bond otherwise can be claimed under this
title, or for which a notice to withhold can otherwise be given under
this title, shall, as a necessary prerequisite to the validity of
any claim of lien, payment bond, and of a notice to withhold, cause
to be given to the owner or reputed owner, to the original
contractor, or reputed contractor, and to the construction lender, if
any, or to the reputed construction lender, if any, a written
preliminary notice as prescribed by this section.
   (b) Except the contractor, or one performing actual labor for
wages as described in subdivision (a) of Section 3089, or a person or
entity to whom a portion of a laborer's compensation is paid as
described in subdivision (b) of Section 3089, all persons who have a
direct contract with the owner and who furnish labor, service,
equipment, or material for which a lien or payment bond otherwise can
be claimed under this title, or for which a notice to withhold can
otherwise be given under this title, shall, as a necessary
prerequisite to the validity of any claim of lien, claim on a payment
bond, and of a notice to withhold, cause to be given to the
construction lender, if any, or to the reputed construction lender,
if any, a written preliminary notice as prescribed by this section.
   (c) The preliminary notice referred to in subdivisions (a) and (b)
shall contain the following information:
   (1) A general description of the labor, service, equipment, or
materials furnished, or to be furnished, and an estimate of the total
price thereof.
   (2) The name and address of the person furnishing that labor,
service, equipment, or materials.
   (3) The name of the person who contracted for purchase of that
labor, service, equipment, or materials.
   (4) A description of the jobsite sufficient for identification.
   (5) The following statement in boldface type:
      NOTICE TO PROPERTY OWNER

   If bills are not paid in full for the labor, services, equipment,
or materials furnished or to be furnished, a mechanic's lien leading
to the loss, through court foreclosure proceedings, of all or part of
your property being so improved may be placed against the property
even though you have paid your contractor in full.  You may wish to
protect yourself against this consequence by (1) requiring your
contractor to furnish a signed release by the person or firm giving
you this notice before making payment to your contractor, or (2) any
other method or device that is appropriate under the circumstances.

   (6) If the notice is given by a subcontractor who has failed to
pay all compensation due to his or her laborers on the job, the
notice shall also contain the identity and address of any laborer and
any express trust fund to whom employer payments are due.
   If an invoice for materials or certified payroll contains the
information required by this section, a copy of the invoice,
transmitted in the manner prescribed by this section shall be
sufficient notice.
   A certificated architect, registered engineer, or licensed land
surveyor who has furnished services for the design of the work of
improvement and who gives a preliminary notice as provided in this
section not later than 20 days after the work of improvement has
commenced shall be deemed to have complied with subdivisions (a) and
(b) with respect to architectural, engineering, or surveying services
furnished, or to be furnished.
   (d) The preliminary notice referred to in subdivisions (a) and (b)
shall be given not later than 20 days after the claimant has first
furnished labor, service, equipment, or materials to the jobsite.  If
labor, service, equipment, or materials have been furnished to a
jobsite by a claimant who did not give a preliminary notice, that
claimant shall not be precluded from giving a preliminary notice at
any time thereafter.  The claimant shall, however, be entitled to
record a lien, file a stop notice, and assert a claim against a
payment bond only for labor, service, equipment, or material
furnished within 20 days prior to the service of the preliminary
notice, and at any time thereafter.
   (e) Any agreement made or entered into by an owner, whereby the
owner agrees to waive the rights or privileges conferred upon the
owner by this section shall be void and of no effect.
   (f) The notice required under this section may be served as
follows:
   (1) If the person to be notified resides in this state, by
delivering the notice personally, or by leaving it at his or her
address of residence or place of business with some person in charge,
or by first-class registered or certified mail, postage prepaid,
addressed to the person to whom notice is to be given at his or her
residence or place of business address or at the address shown by the
building permit on file with the authority issuing a building permit
for the work, or at an address recorded pursuant to subdivision (j).

   (2) If the person to be notified does not reside in this state, by
any method enumerated in paragraph (1) of this subdivision.  If the
person cannot be served by any of these methods, then notice may be
given by first-class certified or registered mail, addressed to the
construction lender or to the original contractor.
   (3) When service is made by first-class certified or registered
mail, service is complete at the time of the deposit of that
registered or certified mail.
   (g) A person required by this section to give notice to the owner,
to an original contractor, and to a person to whom a notice to
withhold may be given, need give only one notice to the owner, to the
original contractor, and to the person to whom a notice to withhold
may be given with respect to all materials, service, labor, or
equipment he or she furnishes for a work of improvement, that means
the entire structure or scheme of improvements as a whole, unless the
same is furnished under contracts with more than one subcontractor,
in which event, the notice requirements shall be met with respect to
materials, services, labor, or equipment furnished to each
contractor.
   If a notice contains a general description required by subdivision
(a) or (b) of the materials, services, labor, or equipment furnished
to the date of notice, it is not defective because, after that date,
the person giving notice furnishes materials, services, labor, or
equipment not within the scope of this general description.
   (h) If the contract price to be paid to any subcontractor on a
particular work of improvement exceeds four hundred dollars ($400),
the failure of that contractor, licensed under Chapter 9 (commencing
with Section 7000) of Division 3 of the Business and Professions
Code, to give the notice provided for in this section, constitutes
grounds for disciplinary action by the Registrar of Contractors.
   If the notice is required to contain the information set forth in
paragraph (6) of subdivision (c), a failure to give the notice,
including that information, that results in the filing of a lien,
claim on a payment bond, or the delivery of a stop notice by the
express trust fund to which the obligation is owing constitutes
grounds for disciplinary action by the Registrar of Contractors
against the subcontractor if the amount due the trust fund is not
paid.
   (i) Every city, county, city and county, or other governmental
authority issuing building permits shall, in its application form for
a building permit, provide space and a designation for the applicant
to enter the name, branch, designation, if any, and address of the
construction lender and shall keep the information on file open for
public inspection during the regular business hours of the authority.

   If there is no known construction lender, that fact shall be noted
in the designated space.  Any failure to indicate the name and
address of the construction lender on the application, however, shall
not relieve any person from the obligation to give to the
construction lender the notice required by this section.
   (j) A mortgage, deed of trust, or other instrument securing a
loan, any of the proceeds of which may be used for the purpose of
constructing improvements on real property, shall bear the
designation "Construction Trust Deed" prominently on its face and
shall state all of the following:  (1) the name and address of the
lender, and the name and address of the owner of the real property
described in the instrument, and (2) a legal description of the real
property which secures the loan and, if known, the street address of
the property.  The failure to be so designated or to state any of the
information required by this subdivision shall not affect the
validity of the mortgage, deed of trust, or other instrument.
   Failure to provide this information on this instrument when
recorded shall not relieve persons required to give preliminary
notice under this section from that duty.
   The county recorder of the county in which the instrument is
recorded shall indicate in the general index of the official records
of the county that the instrument secures a construction loan.
   (k) Every contractor and subcontractor employing laborers as
described in subdivision (a) of Section 3089 who has failed to pay
those laborers their full compensation when it became due, including
any employer payments described in Section 1773.1 of the Labor Code
and regulations adopted thereunder shall, without regard to whether
the work was performed on a public or private work, cause to be given
to those laborers, their bargaining representatives, if any, and to
the construction lender, if any, or to the reputed construction
lender, if any, not later than the date the compensation became
delinquent, a written notice containing all of the following:
   (1) The name of the owner and the contractor.
   (2) A description of the jobsite sufficient for identification.
   (3) The identity and address of any express trust fund described
in Section 3111 to which employer payments are due.
   (4) The total number of straight time and overtime hours on each
job.
   (5) The amount then past due and owing.
   Failure to give this notice shall constitute grounds for
disciplinary action by the Registrar of Contractors.
   (l) Every written contract entered into between a property owner
and an original contractor shall provide space for the owner to enter
his or her name and address of residence; and place of business if
any.  The original contractor shall make available the name and
address of residence of the owner to any person seeking to serve the
notice specified in subdivision (c).
   (m) Every written contract entered into between a property owner
and an original contractor, except home improvement contracts and
swimming pool contracts subject to Article 10 (commencing with
Section 7150) of Chapter 9 of Division 3 of the Business and
Professions Code, shall provide space for the owner to enter the name
and address of the construction lender or lenders.  The original
contractor shall make available the name and address of the
construction lender or lenders to any person seeking to serve the
notice specified in subdivision (c).  Every contract entered into
between an original contractor and subcontractor, and between
subcontractors, shall provide a space for the name and address of the
owner, original contractor, and any construction lender.
   (n) Where one or more construction loans are obtained after
commencement of construction, the property owner shall provide the
name and address of the construction lender or lenders to each person
who has given the property owner the notice specified in subdivision
(c).
   (o) (1) Each person who has served a preliminary 20-day notice
pursuant to subdivision (f) may file the preliminary 20-day notice
with the county recorder in the county in which any portion of the
property is located.  A preliminary 20-day notice filed pursuant to
this section shall contain all of the following:
   (A) The name and address of the person furnishing the labor,
service, equipment, or materials.
   (B) The name of the person who contracted for purchase of the
labor, service, equipment, or materials.
   (C) The common street address of the jobsite.
   (2) Upon the acceptance for recording of a notice of completion or
notice of cessation the county recorder shall mail to those persons
who have filed a preliminary 20-day notice, notification that a
notice of completion or notice of cessation has been recorded on the
property, and shall affix the date that the notice of completion or
notice of cessation was recorded with the county recorder.
   (3) The failure of the county recorder to mail the notification to
the person who filed a preliminary 20-day notice, or the failure of
those persons to receive the notification or to receive complete
notification, shall not affect the period within which a claim of
lien is required to be recorded.  However, the county recorder shall
make a good faith effort to mail notification to those persons who
have filed the preliminary 20-day notice under this section and to do
so within five days after the recording of a notice of completion or
notice of cessation.
   (4) This new function of the county recorder shall not become
operative until July 1, 1988.  The county recorder may cause to be
destroyed all documents filed pursuant to this section, two years
after the date of filing.
   (5) The preliminary 20-day notice which a person may file pursuant
to this subdivision is for the limited purpose of facilitating the
mailing of notice by the county recorder of recorded notices of
completion and notices of cessation.  The notice which is filed is
not a recordable document and shall not be entered into those
official records of the county which by law impart constructive
notice.  Notwithstanding any other provision of law, the index
maintained by the recorder of filed preliminary 20-day notices shall
be separate and distinct from those indexes maintained by the county
recorder of those official records of the county which by law impart
constructive notice.  The filing of a preliminary 20-day notice with
the county recorder does not give rise to any actual or constructive
notice with respect to any party of the existence or contents of a
filed preliminary 20-day notice nor to any duty of inquiry on the
part of any party as to the existence or contents of that notice.
   (p) (1) The change made to the statement described in subdivision
(c) by Chapter 974 of the Statutes of 1994 shall have no effect upon
the validity of any notice that otherwise meets the requirements of
this section.  The failure to provide, pursuant to Chapter 974 of the
Statutes of 1994, a written preliminary notice to a subcontractor
with whom the claimant has contracted shall not affect the validity
of any preliminary notice provided pursuant to this section.
   (2) (A) The inclusion of the language added to paragraph (5) of
subdivision (c) by Chapter 795 of the Statutes of 1999, shall not
affect the validity of any preliminary notice given on or after
January 1, 2000, and prior to the operative date of the amendments to
this section enacted at the 2000 portion of the 1999-2000 Regular
Session, that otherwise meets the requirements of that subdivision.
   (B) A preliminary notice given on or after January 1, 2000, and
prior to the operative date of the amendments to this section enacted
at the 2000 portion of the 1999-2000 Regular Session, shall not be
invalid because of the failure to include the language added to
paragraph (5) of subdivision (c) by Chapter 795 of the Statutes of
1999, if the notice otherwise complies with that subdivision.
   (C) The failure to provide an affidavit form or notice of rights,
or both, pursuant to the requirements of Chapter 795 of the Statutes
of 1999, shall not affect the validity of any preliminary notice
pursuant to this section.
  SEC. 2.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect.  The facts constituting the necessity are:
   Section 3097 of the Civil Code, as amended by Chapter 795 of the
Statutes of 1999 (Senate Bill 914), effective January 1, 2000,
references provisions of the Civil Code that were not enacted.  This
bill deletes those erroneous references by changing the "Notice to
Owner" in paragraph (5) of subdivision (c) of that section to its
previous language and deleting subdivision (q) of that section.
